Correlation Between Elcora Advanced and Northern Lion
Can any of the company-specific risk be diversified away by investing in both Elcora Advanced and Northern Lion at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elcora Advanced and Northern Lion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elcora Advanced Materials and Northern Lion Gold, you can compare the effects of market volatilities on Elcora Advanced and Northern Lion and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elcora Advanced with a short position of Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcora Advanced and Northern Lion.
Diversification Opportunities for Elcora Advanced and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elcora and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elcora Advanced Materials and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold and Elcora Advanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elcora Advanced Materials are associated (or correlated) with Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of Elcora Advanced i.e., Elcora Advanced and Northern Lion go up and down completely randomly.
Pair Corralation between Elcora Advanced and Northern Lion
Assuming the 90 days horizon Elcora Advanced Materials is expected to generate 5.83 times more return on investment than Northern Lion. However, Elcora Advanced is 5.83 times more volatile than Northern Lion Gold. It trades about 0.02 of its potential returns per unit of risk. Northern Lion Gold is currently generating about -0.04 per unit of risk. If you would invest 3.50 in Elcora Advanced Materials on September 5, 2024 and sell it today you would lose (2.42) from holding Elcora Advanced Materials or give up 69.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elcora Advanced Materials vs. Northern Lion Gold
Performance |
| Timeline |
| Elcora Advanced Materials |
| Northern Lion Gold |
Elcora Advanced and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcora Advanced and Northern Lion
The main advantage of trading using opposite Elcora Advanced and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcora Advanced position performs unexpectedly, Northern Lion can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Northern Lion will offset losses from the drop in Northern Lion's long position.| Elcora Advanced vs. Ceylon Graphite Corp | Elcora Advanced vs. Syrah Resources Limited | Elcora Advanced vs. Graphex Group Limited | Elcora Advanced vs. Lynas Rare Earths |
| Northern Lion vs. Qubec Nickel Corp | Northern Lion vs. IGO Limited | Northern Lion vs. Avarone Metals | Northern Lion vs. Elcora Advanced Materials |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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